Does Financial Knowledge Matter in Using Fintech Services? Evidence from an Emerging Economy

Financial technology (FinTech) is one of the most important contributors applying technological applications to access financial products in financial markets. This research analyzes the determinants of financial knowledge and its impact on using FinTech services by employing survey data from a sample of 527 individuals in the southeast region of Vietnam, an emerging economy. The results indicate that women have a lower level of both actual financial knowledge and perceived financial knowledge than men. Moreover, men have a higher propensity to use FinTech services than women. Younger people also have higher FinTech usage compared with older people. Unlike previous studies in the financial field, an interesting finding emphasizes that actual financial knowledge does not affect the use of FinTech services but perceived financial knowledge does. To ensure the findings are robust, the research uses instrumental variable (IV) method, and 2SLS (two-stage least squares) estimation to resolve endogenous problems. Accordingly, to promote financial well-being, the findings suggest that financial institutions or FinTech firms should design and develop more user-friendly FinTech products and services so even older people can gain access to FinTech usage. Additionally, policymakers should devote attention to user protection in emerging economies where people are considered less financially literate.